The market is funny sometimes. Nothing's really changed in the month since Watson Pharmaceuticals
In the second quarter, Watson reported net revenue growth of 12% to $399.4 million. However, net income fell 31% to $34.9 million, or $0.32 per share. Excluding charges from a milestone payment and a debt repurchase, earnings clocked in at $0.40 per share -- roughly where the company said it'd be.
Sales of generic drugs remained hot, jumping 39% to $224.3 million. But as the company reported last month, poor sales of its women's health products -- namely oral contraceptives -- as well as declining sales of mature pain products helped mute those gains, leading to an 11% drop in branded product sales to $165.8 million.
The higher mix of generic to brand product sales also affected gross margins, which slipped to 50.2% from 56.6% in last year's second quarter.
But the outlook hasn't changed. For the full year, Watson still expects to earn $1.63 to $1.68 per share -- $1.85 to $1.90 per share excluding charges -- on approximately $1.6 billion in net revenues. Meanwhile, the company forecast third-quarter earnings excluding charges of $0.44 to $0.46 per share on about $390 million in revenues.
While Watson has struggled in its branded efforts -- an effort generic counterparts Mylan Laboratories
Fool contributor Jeff Hwang owns none of the companies mentioned above.
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